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The Loan Participation Program assists farmers in making down payments for the purchase of agricultural land, depreciable machinery or equipment, breeding livestock or buildings.
Applicants must be a resident of Iowa and 18 years of age.
Have a net worth of no more than $820,000.
Have sufficient education, training or experience for the anticipated farm operations.
Have access to adequate working capital, equipment and other items that are necessary to operate the farm.
Be the owner/operator.
Have off-farm income of no more than 50% of their projected total gross income.
Current Ratio: Cannot be less than 1.1 without guaranteed source of repayment.
Debt to asset ratio: Cannot exceed 80% without guaranteed source of repayment.
Debt Service Coverage: Cannot be less than 120% without guaranteed source of repayment.
Corporations, Partnerships, LLCs are eligible but the beginning farmer must be listed as a co-borrower.
Down Payment
The assistance can be used to supplement eligible beginning farmers’ down payment so that they can more readily secure a loan from a participating lender.
Maximum Loan: 30% purchase price or $200,000, whichever is less.
Closing Fee: 1.50% of IADD participation loan; $300 minimum.
10-year terms: Loans can be amortized for 20 years for land purchases or 12 years for facilities with a balloon at 10 years.
2024 Interest Rate: 5.00%
Complete Loan Participation application with lender.
Submit the completed application and the $100 application fee to the IADD office by the first of the month.
The IADD Board will review the application; if approved, a Conditional Commitment to Participate will be sent to the lender.
After completion of the LPP Conditional Commitment, the loan may be closed. The lender will then continue to work with the farmer to service the loan.
The program enables lenders to request a “last-in/last-out” loan participation from IADD.
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